Minister: Orinoco Nationalization Decree Due by May

Orinoco Heavy Oil Belt
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Venezuela's government has drafted the decree to nationalize the four projects in the Orinoco extra-heavy oil belt and will publish them in the official gazette between now and May, energy and oil minister Rafael Ramirez told BNamericas.

Venezuela's pro-government national assembly unanimously agreed on January 31 to grant President Hugo Chávez special powers for 18 months to regulate hydrocarbons and their derivates, electric power, telecommunications and other "strategic" industries. As such, the president's special powers allow him to nationalize the Orinoco projects by decree.

"The nationalization decree is ready. It will be published in the official gazette in March. Let's say that by May 1 the process will be finalized," Ramirez said.

The official gazette is the government's newspaper of record that publishes all laws, decrees and official appointments.

The four Orinoco projects - Ameriven, Petrozuata, Cerro Negro and Sincor - have capacity to produce 620,000b/d of oil but, according to the International Energy Agency, are churning out less than 600,000b/d.

Sincor is by far the largest with production of almost 200,000b/d.

PDVSA now has a stake of 40% in each project on average. Ramirez has said the goal is to increase the stake to 60%.

Foreign partners in the Orinoco projects include US oil and gas major ExxonMobil (NYSE: XOM), the UK's BP, US major ConocoPhillips (NYSE: COP), France's Total (NYSE: TOT), Norway's Statoil and US oil and gas major Chevron (NYSE: CVX).

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